Product Sourcing: Online Consignment Business

Consignment is a simple concept: taking other people’s products and selling them for a percentage of the sale. According to Skip McGrath, of, a successful eBay PowerSeller, “[Consignment selling] is the fastest-growing phenomenon on eBay.” The key to successful online consignment is marketing your services. You really have to promote your business, and McGrath shares some techniques for doing just that. There are four areas you’ll use: advertising, public relations, networking and creating a website.


The market you’re in will determine your course of action here:

  • The Retail Market – selling products for ordinary people:

    • Door hangers
    • Classified ads in small to medium-sized market newspapers
    • Flyers
    • Attorneys – estate executors and bankruptcy processors
  • The Business to Business Market – selling excess inventory for retailers and manufacturers:

    • Classified ads in business journals
    • Direct mail
    • Attorneys – bankruptcy processors
    • Local charities and not-for-profits— rather than always asking their supporters for money, they can ask them to donate products you know will sell.

Public Relations

Write a press release, print out a copy and mail it to all your local newspapers—they might promote your new business in hopes you’ll advertise with them.

  • Community groups—the Lions, the Jaycees, your local chamber of commerce.
  • Networking
  • The McGrath Three-foot Rule. Explains McGrath, “I always have business cards on me…and anyone that gets within three feet of me [is] going to learn what I do.”
  • Cold call on potential customers. Walk around the business section of town (or your neighborhood for retail), and let them know that you can help them liquidate their surplus merchandise.

Create a website

Try to include your city and the word “consignment” in the title—these are very popular search terms right now.

  • Have a link from your site to your consignors so they can check the status of their own auctions.
  • Send out emails or newsletters through your website to your customer database.
  • You may find somemethodswork for you better than others, but themain thing is just to let the world know you’re there—get the word out!
PEC Staff
PEC Staff
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